TOKYO – Asia shares mostly fell in Monday trading as worries grow about President Donald Trump imposing tariffs on key U.S. trading partners.

Japan’s benchmark Nikkei 225 lost 2.4% in early trading to 38,612.96. Australia’s S&P/ASX 200 declined 1.8% to 8,376.30. South Korea’s Kospi dropped 2.9% to 2,443.57. Hong Kong’s Hang Seng dipped 1.4% to 19,942.54, while the Shanghai Composite also was lower but little changed at 3,250.60.

Analysts said Asian markets were bracing for volatility set off by a possible trade war escalation.

“The implications for trade restrictions could result in reduced global trade flows, supply chain shifts which could mean higher costs for businesses, and higher inflation,” said Yeap Jun Rong, market strategist at IG.

Wall Street ended last week lower, with the S&P 500 falling 0.5%. The Nasdaq composite dropped 0.3%. The indexes posted their first weekly loss in three weeks. The Dow Jones Industrial Average fell 0.8%.

The selling in New York was broad, with about 75% of the stocks in the S&P 500 closing lower. Technology and energy companies accounted for a large share of the decline.

Investors have been jolted by a report from a Chinese upstart, DeepSeek about developing a cheaper large language model that can complete globally. The disruption raised questions about whether all the investment expected for AI chips is really needed, sending some technology shares tumbling.

Trump’s 25% tariffs on most imports from Canada and Mexico and 10% tariffs on goods from China are to take effect Tuesday. His administration has not said what specific improvements would need to be seen in stopping illegal immigration and the smuggling of fentanyl to merit the removal of the tariffs.

Canada and Mexico ordered retaliatory tariffs on American goods. Canada’s will take effect Tuesday on a range of products, while Canada didn’t give immediate details.

Tariff worries helped push long-term bond yields higher, including the 10-year Treasury, which rose to 4.54% Friday from 4.52% late Thursday. Yields have been generally climbing since September as the U.S. economy has remained much more solid than economists expected.

Also last week, the U.S. Federal Reserve left its benchmark interest rate unchanged, taking a more cautious view on how policies under Trump might impact inflation and the broader economy.

In energy trading, benchmark U.S. crude jumped $1.10 to $73.63 a barrel. Brent crude, the international standard, gained 40 cents to $76.07 a barrel.

In currency trading, the U.S. dollar edged up to 155.55 Japanese yen from 155.18 yen. The euro cost $1.0226, down from $1.0363.